Press Release: 03 February 2016
Related Companies makes a ground-breaking strategic investment in Pocket to greatly expand for-sale affordable housing in London
Related, one of America’s largest owners and developers of affordable housing, has made a 50% investment in Pocket, the innovative private company delivering affordable homes for First Time Buyers in London.
2016 has been billed as “The Year of the First Time Buyer” with the launch of the Help to Buy ISA, London Help to Buy and Starter Homes.
[February 3 2016] Pocket, the leading developer of homes for first time buyers in London, today announced a landmark deal with Related Companies, one of the largest owners and developers of affordable housing in the U.S. Related’s strategic investment in Pocket, acquiring a 50% stake in the company, marks the first transaction of its kind, where a U.S. real estate firm has invested in the UK’s affordable housing market to help working people into home ownership. It also coincides with the launch of a suite of initiatives by the Government to attract more first time buyers into the market.
Related is one of America’s most prominent real estate firms. It owns and operates a premier portfolio of high quality global assets valued at over $20bn. Last year, Related created a partnership with Argent, one of the UK’s leading mixed-use regeneration specialists. Through this transaction, Pocket and Argent Related will become strategically affiliated.
Pocket builds compact one bedroom homes for first time buyers at a discount of at least 20% to the open market. The homes are reserved for those that earn less than the GLA’s income cap for affordable housing, live or work in the borough of the development and don’t own another property. As demand for affordable homes skyrockets, Pocket has doubled its pipeline year-on-year since 2013 and will aim to complete 4,000 homes by 2023.
Marc Vlessing, Co-Founder and CEO of Pocket, said:
“This transaction is a huge vote of confidence in Pocket. Our aspiration is to help ordinary hard-working Londoners into long term affordable housing. There is currently no end to the demand for our product and with Related’s support, we believe that we can deliver access to a wider range of for-sale and rental homes for this valuable audience.
“2016 is the year of the first time buyer with the Government’s launch of the Starter Homes initiative and London Help to Buy which will sit alongside the already active Help to Buy ISA. We are really excited about partnering with Stephen Ross, Ken Wong and his colleagues at Related to enable as many people as possible into homeownership.”
Prime Minister David Cameron's mission to 'turn generation rent into generation buy' will help transform the first time buyer market. Today’s investment shows that high-profile international businesses are beginning to look more closely at UK housing, and seeking strategic partnerships to help deliver on the Government’s ambitions.
Stephen Ross, Chairman and Founder, Related Companies, said:
“I founded Related Companies in 1972 with a focus on developing, operating, and preserving Affordable Housing across the United States and it remains at the core of our diversified company today. Great cities must provide housing for the full range of its workforce and we believe Pocket provides a smart solution -- well-designed, quality-built, affordable housing in the parts of London where its knowledge workers want to live and work. Marc Vlessing and Paul Harbard have created a great company and culture and we look forward to helping them grow.”
Affordable housing laid the foundations for Related Companies and Related has developed or acquired over 55,000 affordable homes in the U.S. and has a long history of partnering with innovative organizations committed to constructing or preserving affordable housing. The strategic investment in Pocket reflects this approach, and will draw upon Related’s access to capital, scale and expertise in delivering affordable homes for rent as well as Pocket’s proven innovation in the UK affordable housing market.
Pocket is already working with Argent at King’s Cross and worked with Argent Related on its successful bid to partner the London Borough of Barnet at Brent Cross South. This affiliation offers the ability to provide a full spectrum of housing solutions.
Kenneth P. Wong, Related Chief Operating Officer and Pocket Board Member, said
“We have ambitious plans in London and Pocket is a perfect strategic fit with our ongoing initiatives. As a Related portfolio company, Pocket will now have a broader resource base, greater access to capital and our shared best practices. We look forward to enhancing Pocket’s pipeline and providing affordable housing solutions to governments, landowners, local communities and other developers.”